Applying Economics 101 to Content:

Rafat Ali

Jul. 2, 2002 - 1:08 PM PST
Jul. 2, 2002 - 1:08 PM PST

Applying Economics 101 to Content: Vin Crosbie applied some basic economic lesson to online content, and comes to the conclusion that the currently-hobbled transactional nature of online content is inhibiting the adoption of payment models. In other words, costs of a user paying a small amount for content results in inefficiency, since the publisher has to pay intermediaries such as Visa, PayPal etc. “The fees are larger than the transactions themselves. As current infrastructures can’t process the prices online users might be willing to pay, the sites can’t charge anything at all. They’re free access.”

Another argument for perhaps the “cable model”, an argument which has been re-packaged by various pundits in the past…